Earnings Results: Match stock gains after company says Tinder subscriber trends stabilized in April

Earnings Results

Coronavirus leading to ‘headwinds’ in average revenue per user as some customers switch to cheaper plans, company says


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Shares of Match Inc. were up 0.7% in after-hours trading Tuesday after the online-dating company matched first-quarter revenue expectations and said Tinder subscriber trends were “stabilizing” in April after dropping sequentially in March.

Match
MTCH,
+3.78%

generated net income of $160.4 million, or 55 cents a share, up from $123 million, or 42 cents a share, in the year-earlier period. The online-dating pioneer reported earnings before interest, taxes, depreciation, and amortization (Ebitda) of $171.5 million, above the $155.1 million it recorded a year prior. Analysts surveyed by FactSet were expecting 34 cents in EPS and $170 million in Ebitda.

The company posted revenue of $545 million, up from $465 million in the prior March quarter and even with the FactSet consensus.

Match said Tinder subscribers averaged 6 million in the quarter, compared with an average of 5.9 million in the December quarter. The Tinder subscriber numbers matched the FactSet consensus.

The company said in its letter to shareholders that it’s “seen a noticeable increase in activity among users, especially those under the age of 30, across all of our brands and all geographies.”

Match saw the average number of daily messages sent across its products rise 27% in April relative to the last week of February. For users under the age of 30, the daily average message count was 35% higher.

Still, Match is “seeing some headwinds to new users signing up and the motivation to pay,” noticeably among older user and those in areas that have seen deeper impacts from COVID-19. “On Tinder, this led to first-time subscriber declines sequentially from February to March before stabilizing in April, though first-time subscribers were up meaningfully year-over-year in each month,” Match said in the shareholder letter.

The company is also seeing “headwinds” to average revenue per user as some customers switch to lower tiers and make fewer a la carte purchases.

“Absent a dramatic change relative to April trends, we expect revenue in Q2 to grow year-over-year, but decline sequentially on a percentage basis by low single digits,” Match said in its shareholder letter.

The company expects its full separation from IAC/InterActiveCorp.
IAC,
+2.35%

to take place in the second quarter.

Shares of Match have gained 5.4% over the past three months, as the S&P 500
SPX,
+0.90%

has declined 14%.

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